ACC 211 Lecture Notes - Lecture 4: Accounts Receivable, Retained Earnings, Income Statement

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apricotwoodchuck413

15 Feb 2017

School

University of Miami

Department

Accounting Business Administration

Course

ACC 211

Professor

Levine Seth

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Document Summary

Adjusting journal entries: deferred (delayed) expenses, prepaid expenses, prepaid rent, supplies, equipment, these start as assets, but will become deferred expenses, pay money now, use the expense later, assets de(cid:272)(cid:396)ease, owne(cid:396)"s e(cid:395)uity de(cid:272)(cid:396)eases. If you buy car insurance for the next 6 months; when you buy it: If you buy american airlines ticket to go to mia in january and return in february; as aa: Credit service revenue: get money now, earn revenue/deliver service later, lia(cid:271)ilities de(cid:272)(cid:396)ease, owne(cid:396)"s e(cid:395)uity in(cid:272)(cid:396)ease, accrued expenses, electric bill, phone bill, water bill, advertising bill, record expense now pay later, lia(cid:271)ilities in(cid:272)(cid:396)ease, owne(cid:396)"s e(cid:395)uity de(cid:272)(cid:396)eases. 1/1/17 borrow from bank, 1 year, 6% interest. Credit interest payable: accrued revenues, earn the revenue now, collect money later. Landscaper mows 100 lawns for /lawn = ; bills them. 1 income statement account (expense or revenue) And 1 balance sheet account (asset or liability) Cash does not appear in any aje.

Related Questions

Question 16

Corresponds to CLO 3(d) Hemmingway Corporation paid salaries of$5,000 and advertising expense of $2,000. Which of the followingjournal entries correctly records these expenses?

		Debit: Cash $7,000 Credit: Salaries/Wages Expense$5,000 Credit: Advertising Expense $2,000
		Debit: Salaries/Wages Expense$5,000 Debit: Advertising Expense $2,000 Credit: Cash$7,000
		Debit: Salaries/Wages Expense$5,000 Debit: Advertising Expense $2,000 Credit: Salaries/Wages Payable$5,000 Credit: Accounts Payable$2,000
		Debit: Salaries/Wages Expense$5,000 Debit: Advertising Expense $2,000 Credit: Cash$8,000

3 points

Question 17

Corresponds to CLO 4(a) Which of the following statements iscorrect regarding accrued revenues and unearned revenues, beforeadjusting entries have been made?

		Accrued revenues have not been earned and unearned revenues havebeen earned.
		Accrued revenues have been paid and unearned revenues havenot.
		Accrued revenues have not been recorded and unearned revenueshave been recorded.
		Accrued revenues have been recorded and unearned revenues havebeen recorded.

3 points

Question 18

Corresponds to CLO 4(b) Hudson Law Corporation received $5,500cash for legal services to be rendered in the future. The fullamount was credited to the liability account Unearned ServiceRevenue. At the end of the period, Hudson determines that $3,000 ofthe legal services have been rendered. The appropriate adjustingjournal entry to be made at the end of the period is:

		debit Unearned Service Revenue, $3,000; credit Cash, $3,000.
		debit Unearned Service Revenue, $3,000; credit Service Revenue,$3,000.
		debit Unearned Service Revenue, $2,500; credit Service Revenue,$2,500.
		debit Service Revenue, $2,500; credit Unearned Service Revenue,$2,500.

3 points

Question 19

Corresponds to CLO 4(c) Ace Corporation purchased officesupplies costing $13,000 and debited Office Supplies for the fullamount. At the end of the accounting period, a physical count ofoffice supplies revealed $2,700 still on hand. The appropriateadjusting journal entry to be made at the end of the period is:

		debit Office Supplies Expense, $10,300; credit Office Supplies,$10,300.
		debit Office Supplies, $10,300; credit Office Supplies Expense,$10,300.
		debit Office Supplies Expense, $2,700; credit Office Supplies,$2,700.
		debit Office Supplies, $2,700; credit Office Supplies Expense,$2,700.

3 points

Question 20

Corresponds to CLO 4(d) On September 1, Northgate paid $18,000to Evans Management Company for 12 months of rent beginning onSeptember 1. The appropriate journal entry was made to record thistransaction. If financial statements are prepared for the 9 monthsended September 30, the adjusting entry to be made by Northgateis:

		debit Rent Expense, $13,500; credit Prepaid Rent, $13,500.
		debit Prepaid Rent, $1,500; credit Rent Revenue, $1,500.
		debit Prepaid Rent, $1,500; credit Rent Expense, $1,500.
		debit Rent Expense, $1,500; credit Prepaid Rent, $1,500.

3 points

Question 21

Corresponds to CLO 5(a) Lennox Corporation purchased a newdelivery truck for 35,000. The sales taxes are $2,700. The logo ispainted on the side of the truck for $800. The truck's annuallicense is $200. Annual insurance on the truck is $1,300. Whatshould Lennox record as the cost of the new truck?

		$40,000
		$38,500
		$37,700
		$35,000

3 points

Question 22

Corresponds to CLO 5(b) On April 1, 2013, Ballard Corporationpurchased equipment for $65,000. It is estimated that the equipmentwill have a $5,000 salvage value at the end of its 5 year usefullife. If Ballard uses the straight-line method of depreciation,what is the accumulated depreciation at December 31, 2013?

		$13,000
		$12,000
		$9,750
		$9,000

3 points

Question 23

Corresponds to CLO 5(c) Tyree Company purchased equipment with acost of $90,000 and an estimated salvage value of $18,000. Theequipment is expected to produce 150,000 units over its estimateduseful life of 10 years. If Tyree uses the units-of-activitymethod, what is the depreciation cost per unit to be used incalculating depreciation?

		$1.67
		$0.48
		$2.08
		$0.60

3 points

Question 24

Corresponds to CLO 5(d) Kerns Company purchased equipment with acost of $200,000 and an estimated salvage value of $10,000. Theequipment has an estimated useful life of 10 years. If Kerns usesthe double-declining balance method, what is the annualdepreciation rate to be used in calculating depreciation?

		5%
		10%
		20%
		40%

3 points

Question 25

Corresponds to CLO 6(a) Marshall Machinery made a sale for$150,000 on March 31. The customer is sent a statement on April 6and payment is received on April 15. Marshall prepares March'smonthly internal financial statements on April 20. Marshall followsGAAP and applies the revenue recognition principle. When is the$150,000 considered to be earned?

		March 31
		April 6
		April 15
		April 20

apricotbutterfly16

Eli Enterprises has just completed its first full year of operations on December 31, 2018. It provides accounting services to not-for-profit organizations. The unadjusted (normal) trial balance is presented below:

Eli Enterprises
Trail Balance â unadjusted (normal)
As of December 31, 2018

Account Title	Debit	Credit
Cash	$ 20,000	$ .
Accounts Receivable	50,000
Supplies	5,000
Prepaid Rent	7,200
Equipment	200,000
Notes Payable		75,000
Accounts Payable		15,000
Unearned Service Revenues		12,000
Common Stock		100,000
Retained Earnings		50,000
Dividends	1,300
Service Revenues		800,000
Salaries Expenses	700,000
Advertising Expense	50,000
Utilities Expenses	18,500

Total	$ 1,052,000	$ 1,052,000

An analysis of the firmâs records reveals the following:

a. Equipment purchased January 1, 2018, has an estimated life of ten years.

b. Utilities expense does not include the expense for December, estimated at $1,650. The bill will not arrive until January, 2019.

c. The balance in Prepaid Rent represents the amount paid for a three-year insurance beginning on January 1, 2018.

d. On July 1, 2018, management borrowed $ 75,000 on a two-year note paying interest of four percent each year.

e. On September 25, 2018, management received $ 12,000 (unearned service revenues) to perform services from October 1, 2018 through June 30, 2019, nine months.

Required: Prepare adjusting entries in journal entry form.

goldguinea-pig340

I need to journalize these transactions. Trying to keep thesebalanced is difficult, and I've been confused as to what accountsto debit/credit. If you could help me fill this out, that would begreatly appreciated.

For the past several years, Aaron Jones has operated aconsulting business from his home on a part-time basis. As ofDecember 1, 20X1, Aaron decided to move to rented quarters andincorporate his business as Progress Consulting Inc. ProgressConsulting entered into the following transactions duringDecember:

1st AaronJones invested the following assets in the business: cash, $50,000;supplies,

$10,000; and office equipment, $30,000. Mr. Jones received stockin an

amount equal to his investment in the corporation.

2nd Paid $9,000for rent for December 20X1 through February 28, 20X2.

3rd Paid$12,000 for a one year premium on property and casualty insurance.The

policy covers the period December 1, 20X1 to November 30,20X2.

4th Received $16,000 cash from a client as an advance payment forservices to be

performed in the future.

5th Purchased additional office equipment on account from Payne Companyfor $10,000.

10th Paid $7,500 for anewspaper advertisement that ran in todayâs paper.

11th Paid Payne Company$3,000 for part of the debt incurred on December 5.

12th Billed clients forservices performed on account, $5,800.

17th Received cash paymentfrom client for services performed on this date, $14,000.

18th Paid $6,000 forsupplies.

20th Billed clients forservices performed on account, $15,000.

24th Received cash paymentfrom client for services performed on this date, $2,000.

25th Received cash fromclients as payment on account, $3,000.

30th Paid $750 forutilities for December.

31st Paid cash dividend of$5,000.

These are the accounts we have:

PROGRESS CONSULTING: Chart of Accounts

11 Cash

12 Accounts Receivable

14 Supplies

15 Prepaid Rent

17 Prepaid Insurance

18 Office Equipment

19 Accumulated Depreciation

21 Accounts Payable

22 Wages Payable

23 Unearned Revenues

31 Common Stock

34 Retained Earnings

35 Dividends

37 Income Summary

41 Service Revenues

51 Insurance Expense

52 Advertising Expense

53 Rent Expense

55 Supplies Expense

57 Depreciation Expense

59 Utilities Expense

60 Wage Expense

Date		Description	Debit	Credit
Dec	1	Cash	50,000
	1	Supplies	10,000
	1	Office Equipment	30,000
	1	Common Stock		90,000
	2

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ACC 211 Lecture Notes - Lecture 4: Accounts Receivable, Retained Earnings, Income Statement

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